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- Excel Tip – Understanding The Dollar Sign In An Excel Formula
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## Excel Tip – Understanding The Dollar Sign In An Excel Formula

As you probably know, formulas refer to cells by pointing to a cell reference, such as A1 and B2.

There are three types of cell references that cannot be used in Excel: relative, absolute, and mixed.

**Relative cell references**. With these types of cell references, if you copy or move the formula to a different cell than the one where the formula was entered, the cell references will change relative to their new location.

The row and column parts of the formula are not preceded by a $ sign. For example, A1 is a relative reference to cell A1. When a reference is moved or copied, it changes by the same number of rows and columns as it was moved. So, if you move the formula with relative reference A1 down one cell and to the right, the reference changes to B2. As we know, this behavior is very useful and allows you to copy the formula across or down the page and automatically refer to the new column or row it is in.

For example, if we have a column with the formula D3=SUM(B3:C3), we can drag the D3 formula down the column to D10 and sum all the relative row data down to row 10 very quickly.

**Absolute cell references**– In some situations, you may want the cell reference to remain constant or so-called absolute. This is where $ is used. A good example of this is if we have a static value for the VAT rate, we can store the value of the VAT rate in a cell such as G2, then reference that cell in our formula. A typical formula would look something like this –

=A2*$G$2, where A2 is the sales value and G2 contains the VAT rate.

The $ signs around both rows and columns ensure that even if we drag the formula across rows or columns, the VAT rate reference remains the same, i.e. absolute.

**Mixed references **– they are exactly that – a mix of either column or fixable row. The best example of this type of pf referencing is a time table where we want each cell to be the product of its row and column header. Let’s say the table starts at column A and row 1.

In cell B2, the formula without the dollars would be A2*B1, but for this formula to work when copied to each column, we need it to always look at column A as the first reference, and for it to work for each row, we need to always look at row 1 for the second reference. Using the dollar sign for this, it becomes =$A3*B$1. It can be dragged across the entire timeline and Excel will automatically fill it correctly.

Remember that the fastest way to insert a $ sign is to press the F$ key while entering the formula. Pressing F4 repeatedly toggles between no dollar signs, both dollar signs, row only, and column.

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